Microsoft Continues to Obscure Its Real Cloud Revenue

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Microsoft Continues to Obscure Its Real Cloud Revenue

Microsoft beat analyst expectations for its most recent quarter, pulling in a profit of 78 cents a share on $25.7 billion in revenue, versus predicted 71 cents on $25.26. The company touts to strong growth in its "Intelligent Cloud" division as one of the main highlights of the quarter. Year over year, the division grew by 5 percent to $6.3 billion in revenue. That certainly bodes well for the Microsoft, which is seeking to reinvent itself as a mobile and cloud computing company, markets led by rivals like Apple, Amazon, and Google. But Microsoft's numbers say little about how it actually compares to those rivals.

At first glance, it appears that Microsoft is making far more on its cloud services than Amazon, which made $2.41 billion last quarter from its Amazon Web Services division. The problem is that, in reporting its results, Microsoft bundles its Azure line of cloud services with Windows Server and other traditional enterprise software sales together under the label "Intelligent Cloud" without revealing what percentage of that total actually comes from Azure. That makes an apples to apples comparison with Amazon Web Services impossible.

Make no mistake, Microsoft's cloud is growing fast. Azure revenue grew by 140 percent, nearly triple what it was at this time last year. But without knowing the actual starting numbers, it's impossible to tell for sure if it's actually making a dent in the cloud market.